Tuesday, 22 June 2010


It was very reassuring as a former candidate to hear clear Lib Dem manifesto commitments being announced in today's budget speech along with the necessary pain of higher taxes. If you remain dubious about the coalition (I do!) you may reassure yourself as follows:

1. From next year pensions will be linked to earnings, reversing a Tory decision from the 1980s which Labour avoided addressing for 13 years. That's a clear Lib Dem manifesto commitment. Our manifesto said we would increase pensions by the same rate as earnings, prices or 2.5%, whichever was bigger in any given year and that's exactly what Osborne said today.

2. From April 2011 the income tax threshold will be raised by £1000 to £7475, taking 880,000 people out of tax altogether. It's not quite the £10,000 we wanted but it is a huge step towards this goal and I am certain it would not have been introduced if there had not been Lib Dems around the Cabinet table.

3. Tax rises for public sector workers will be frozen but those on incomes below £21,000 will see increases of £250 a year. Our manifesto committed us to increases for lower paid public sector workers of around £400 so once again we have got pretty much what we asked for.

4. Capital Gains Tax will be increased to 28% from midnight. That's a surprisingly bold move from this Tory Chancellor but a very welcome one and another LD commitment delivered in large part. Tory right-wingers must be spitting blood.

5. From January 2011 a banking transactions levy will be introduced ahead of a much talked about global agreement over such a plan. That's another Lib Dem manifesto commitment which I doubt a majority Tory government would have introduced on its own.

6. A White Paper will be introduced in the autumn to propose changes to assist regional development, endorsing our manifesto commitments to focus on regional stock markets and local investment. By being in coalition, we have a great chance of getting these proposals adopted.

Like most people I remain deeply sceptical about the coalition but such announcements in a budget reassure me and I hope they reassure you. Lib Dems are delivering in government.

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